When you purchase a flip you may have space on your lot to build an ADU to make the property even more appealing to potential buyers. What exactly is an ADU, you may wonder?

An ADU is a dwelling unit that’s separate from the main home and is located on the same lot (this includes garage apartments). It can provide independent living for up to two adults. An ADU can also be located within the main home, as long as it is a separate unit.

There are certain conditions that your ADU must meet in order to be approved by state and local authorities. Since Paces Funding lends in the Carolinas, let’s focus on ADU requirements in the state of South Carolina.

Below, we’ve provided an overview of the requirements you would need to satisfy for an approved unit in the city of Charleston, for example, according to zoning law information we’ve gathered and summarized from the city’s website.

6 Requirements for an Approved ADU in Charleston, S.C.

Either the main home on the property or the ADU must be owner-occupied, and no more than two adults can live in the ADU. 

If a buyer of your flip wants to rent out the ADU for income the unit must meet Affordable Housing income and rental thresholds, as outlined in Charleston’s Zoning Ordinance.

Neither your main home nor the ADU can be used as a short-term rental. (In the city of Charleston a short-term rental is considered anything under 29 days).

You must apply for approval to build an ADU and provide a copy of a recorded covenant affidavit certifying that there aren’t any existing covenants that would prohibit the construction of an ADU.

Your ADU must be provided with one parking space. (In addition to parking for the main home).

ADUs are limited to 850 square feet of conditioned floor space.